701—10.76 (453A) Penalties.
	 10.76(1) Cigarettes. The following is a list of offenses which subject the violator to a penalty:
	  1. 	 The failure of a permit holder to maintain proper records;
	  2. 	 The sale of taxable cigarettes without a permit;
	  3. 	 The filing of a late, false or incomplete report with the intent to evade tax by a cigarette distributor, distributing agent or wholesaler;
	  4. 	 Acting as a distributing agent without a valid permit; and
	  5. 	 A violation of any provision of Iowa Code chapter 453A or these rules.
Penalties for these offenses are as follows:
	  ● 	 A $200 penalty for the first violation.
	  ● 	 A $500 penalty for a second violation within three years of the first violation.
	  ● 	 A $1,000 penalty for a third or subsequent violation within three years of the first violation.
Penalties for possession of unstamped cigarettes are as follows:
	  ● 	 A $200 penalty for the first violation if a person is in possession of more than 40 but not more than 400 unstamped cigarettes.
	  ● 	 A $500 penalty for the first violation if a person is in possession of more than 400 but not more than 2,000 unstamped cigarettes.
	  ● 	 A $1,000 penalty for the first violation if a person is in possession of more than 2,000 unstamped cigarettes for violations occurring prior to July 1, 2004. A $25 per pack penalty for the first violation if a person is in possession of more than 2,000 unstamped cigarettes for violations occurring on or after July 1, 2004.
	  ● 	 For a second violation within three years of the first violation, the penalty is $400 if a person is in possession of more than 40 but not more than 400 unstamped cigarettes; $1,000 if a person is in possession of more than 400 but not more than 2,000 unstamped cigarettes; and $2,000 if a person is in possession of more than 2,000 unstamped cigarettes for violations occurring prior to July 1, 2004. A $35 per pack penalty applies if a person is in possession of more than 2,000 unstamped cigarettes for violations occurring on or after July 1, 2004.
	  ● 	 For a third or subsequent violation within three years of the first violation, the penalty is $600 if a person is in possession of more than 40 but not more than 400 unstamped cigarettes; $1,500 if a person is in possession of more than 400 but not more than 2,000 unstamped cigarettes; and $3,000 if a person is in possession of more than 2,000 unstamped cigarettes for violations occurring prior to July 1, 2004. A $45 per pack penalty applies if a person is in possession of more than 2,000 unstamped cigarettes for violations occurring on or after July 1, 2004.
See rule 701—10.6(421) for penalties related to failure to timely file a return, failure to timely pay the tax due, audit deficiency, and willful failure to file a return with the intent to evade the tax. If, upon audit, it is determined that any person has failed to pay at least 90 percent of the tax imposed by Iowa Code chapter 453A, division I, which failure was not the result of a violation enumerated above, a penalty of 5 percent of the tax deficiency shall be imposed. This penalty is not subject to waiver for reasonable cause.
See rule 701—10.8(421) for statutory exceptions to penalty.
	 10.76(2) Tobacco.
See rule 701—10.6(421) for penalties related to failure to timely file a return, failure to timely pay the tax due, audit deficiency, and willful failure to file a return with the intent to evade the tax.
See rule 701—10.8(421) for statutory exceptions to penalty.
This rule is intended to implement Iowa Code sections 453A.28, 453A.31 and 453A.46 as amended by 2004 Iowa Acts, Senate File 2296.